Argentine investors accept longer tenors

The tenors of Argentine structured deals are lengthening, a welcome development in a market where many investors had been loath to take on long-term financial risk of any kind. The senior tranches of five of the 12 transactions that priced in October averaged a duration of 12.7 months, terming out from a 6.5-month average duration in the same month last year, as tracked by Buenos Aires-based Gainvest Asset Management. The maturities are being pushed out by the growing popularity of longer-term securitizable assets.

Whereas short-term consumer assets and personal loans were the first to make a meaningful comeback in the aftermath of the crisis that peaked in 2002, longer-term mortgage loans and government bonds are increasingly tapped as collateral. "The fact that investors accept investing in longer-term instruments at reasonable rates is a positive sign in the development of a [structured market] that has reached Ps3.16 billion ($1.07 billion) so far this year," Gainvest analysts said in a monthly report on the state of the industry.

Argentina's domestic securitization market witnessed Ps455.6 million of issuance in October, according to the asset manger. The month stands out as having been especially popular with agribusiness originators - three of the four deals issued from debut programs were designed to finance farming activity. The fourth, called CMF Garantizados, is backed by government obligations that were restructured in 2001 (see related cover story).